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SkyDrive was giving 25 GB Free online space for all its users. Microsoft decided to reduce it to 7Gb. But if you are an existing user (who has uploaded files to SkyDriveas of April 22nd ) you can keep the 25 GB otherwise you will have to spent $10.00/Year to get that much space.

Just login to your SkyDrive account and click the alert displaying on the top

Click on the “Free upgrade !” on the next screen

Here is what Microsoft says

We know that many of you signed up for a service that offered 25GB, and some are already using more than 7GB of storage. So, starting today, for a limited time, any registered SkyDrive user *who has uploaded files to SkyDrive* as of April 22nd can opt in to keep 25GB of free storage while still getting all of the benefits of the new service. (For users who are already using more than 4GB as of April 1, we’ve automatically opted you in to 25GB of free storage to avoid any issues.)